Comment / By Chris / April 30, 2009, 10:22 a.m.

Under both the Federal & State False Claims Act the Gov’t has 3 options; (1) Intervene and direct prosecution of the case; (2) decline to intervene which then law spells-out how the complainant prosecutes the case with the Dept Of Justices active in the background, or (3) the DOJ’s petitions the Courts to dismiss the case because they have concluded that the allegations lack merit. Both State and Federal DOJ’s did not petition the court to toss the claim. And, 3 times Defendants’ submitted petitions to the Federal Court to toss the case with an appeal to the 9th Circuit, which summarily dismissed Defendants’ claim.

Moreover, in reply to Hurwitz’s motion that the right to petition the gov’t [i.e. the Headwaters transaction] under the First Amendment protects against fraud, the State DOJ rebuttal brief states “Even when the government chooses not to intervene in an action, it remains the real party [of interest] and retains a significant amount of control over the litigation.” In closing their brief, DOJ writes “These cases further demonstrate that Defendants’ fraudulent activities in connection with the Headwaters sale can be subject to liability under the CFCA.” [Calif. FCA]

Thus, if the respective DOJ’s and Federal Judge believed Defendants’ claims, the case would have been tossed out long ago! Contrary to their public statements, Brosnahan and Defendants very well understand this.

Finally, Hurwitz’s legal fees were approaching $20 million leading up to the trial. Since the DOJ’s did not intervene, they assumed absolutely no liability if judgment was for the Defendants; a free ride for the gov’t if you will!

Comment / By Nick / May 1, 2009, 5:44 p.m.

Remember that Hurwitz believes in the Golden Rule, and he has proved it once again. As he told Pacific Lumber workers soon after seizing control of the company in 1986: “He who has the gold, rules.”

After sucking some $3.75 billion out of Humboldt County (according to Humboldt Watersheds Council) Hurwitz buys his way out of trouble for a mere $4 million and slithers back to Houston. Let’s see, a billion is a thousand million, so $4 mil is slightly more than 1/10 of 1% of Hurwitz’s haul.

The plaintiffs’ lawyers were afraid they wouldn’t get a unanimous jury verdict, based on their jury watching. They were worried that the judge’s ruling barring evidence from the PL bankruptcy filings that showed Hurwitz exercised active control of PL would make it harder to prove their case.

According to two of the jurors interviewed on KMUD News, the jury was going strongly for the plaintiffs, especially after two very strong witnesses on Monday. The evidence of malfeasance was clear and convincing.

If one or two jurors sided with the defendants it would have meant a hung jury and a mistrial. That would not necessarily have ended the case if the plaintiffs stuck with their case and went through a second trial. In the Humboldt Pepper Spray Q-Tip case, the first two trials ended in a hung jury, but the third time was the charm for the plaintiffs.

I’m disappointed that the plaintiffs and their legal team didn’t have the courage and stamina to play their very strong hand to the end, and not settle on such weak terms. Of course that’s said with the advantage of 20/20 hindsight.

I don’t know the circumstances, but maybe the plaintiffs’ legal team wasn’t willing to do it over in case of a hung jury, and was afraid of not getting paid. With this settlement the lawyers will get their $1 million fees and costs paid promptly. If they had won a jury verdict awarding tens or hundreds of millions in damages, Hurwitz would certainly have appealed, and it would have been another two or three years before the appeal would be decided. In the meantime, no money from the defendants, and the defendants might even get lucky at the appeals level and overturn the verdict.

The great majority of civil suits end in a settlement, not a verdict. I just wish they had held out long enough for Hurwitz to have been forced to answer questions under oath in front of the jury and the public, which has never happened before, and which was about to happen. And I wish the plaintiffs had held out a richer settlement that was more painful and humiliating for Mr. “Golden Rule” Hurwitz.

Even though the settlement was disappointing for many of us who have watched and battled Maxxam over the decades, there’s no denying that the result vindicated Paul Gallegos, Tim Stoen, and the citizens who tipped them off to the fraud.

Comment / By Jerry / May 3, 2009, 3:24 p.m.

It has been a long struggle with threats, injury, and the division of communities based upon incorrect and misleading information. EPIC has been a stalwart in protecting the water and beauty of the region. There are solutions but Hurwitz fought to delay any solution so the illegal and unethical practices could continue. And three cheers for Richard Wilson. He struggled mightily with the issues, was dismayed over the politics in the effected counties, and finally fell out on the correct side. With the threats in the air after Redwood Summer, brave people stood firm. Here’s to the courage of many.

Comment / By Copernicus Jones / May 6, 2009, 10:18 a.m.

Here, Here… to the direct action of EF! and Redwood Summer, to the attempt by Stoen/Gallegos… to the people of humboldt that knew what a corporate raider was…unfortunately we fell short with the loggers/workers. Our education campaign fell short on the local timber workers… we should have been united as in days past, solidarity, instead we lost the info war.

Comment / By Lionel Gambill / June 9, 2009, 3:15 p.m.

In 1990 I obtained from Bill Bertain a copy of the civil complaint against defendants Milken, MAXXAM, Hurwitz, Drexel Burnham Lambert, Boesky, Salomon Brothers, Pacific Lumber, and others.

I sent it to Attorney General John Van de Kamp, then Attorney General, State of California, noting as follows:

“Reviews by attorneys indicate there may be a basis for criminal complaint warranting review and possibly action by the Attorney General’s office.

“If the allegations detailed in the civil complaint are valid, Pacific Lumber was illegally taken over by a group of unscrupulous predators, and that company should revert to its original ownership. Justice would be better served by that outcome than by rewarding predators through purchase.”

Months later I was told that my letter was being reviewed by the AG’s San Francisco office.

But 1990 was an election year. In November Dan Lungren was elected Attorney General, and I heard no more about any AG investigation of the matter.